Asian drama - Three crises in Asia

Economically, 1997 appeared to be Asia's Annus Horribilis, and the article is an analysis of the economic turmoil in East and Southeast Asia. It is emphasised that the region is not plagued by one, but by three crises; a financial crisis, an exchange rate crisis and an economic crisis. The depreciation of the Thai currency in July 1997 marked the beginning of the regional crises. However, this happened against the backdrop of large structural weaknesses in several economies in East and Southeast Asia. A common feature was the high short-term foreign debt of banks and companies, denominated in foreign currency. The financial and currency crises reinforced each other, and were amplified by financial panic among local and foreign investors. The article analyses and traces the development of the various crises, explaining why the problems spread to neighbouring countries.